Quantitative hedge fund boutique Sabre Fund Management is looking to break into the UK retail market with a global equity income fund for former JPMorgan and Gam manager Ross Hollyman.
Sabre, based in London’s exclusive Grosvenor Gardens, is in the process of pre-marketing the new fund, Sabre Global Value & Income, and is looking to raise seed money for a launch in the second quarter of 2014.
Mr Hollyman has been with Sabre for two years, running a global hedge fund, and will use the same investment process he has developed through his years at JPMorgan and Gam on UK, European and global equity products.
Sabre is teaming up with Gemini Investment Management to distribute the fund, which will be hosted on Gemini’s Dublin-based Ucits platform.
City-based Gemini, headed by managing director Stuart Alexander, will distribute the fund in the UK and other markets due to Sabre’s inexperience in the UK retail space.
Speaking exclusively to Investment Adviser, Mr Hollyman said that if the global equity income launch is successful, then his quantitative process could be used to branch out into other regional equity products.
The quantitative process uses a wide range of different screens to find prospective value stock ideas from which Mr Hollyman uses his fundamental research to build the portfolio.
Sabre is looking to target principally the advisory market with the new launch, acknowledging that wealth and discretionary managers tend to avoid global products.
But it said the fund is designed to fulfil the need that investors still have for income and would allow them to diversify away from a concentration on UK funds for equity income.
Gemini and Sabre are still in the process of ironing out details, such as the pricing on the new fund, but said it would aim for a yield in excess of 150 per cent of the MSCI World index, which would currently equate to approximately 4 per cent.
Mr Hollyman said he would also be investing 100 per cent of his liquid assets into the fund, to align his interests with investors.
Sabre Fund Management has a long history in the hedge fund arena, having run money for more than 30 years. The current chief executive, Melissa Hill, led a management buyout of the firm in 2005 along with Dan Jelicic, who is the chair of the firm’s investment committee and the brains behind the firm’s flagship hedge fund.
The Sabre Style Arbitrage fund is an equity market neutral fund, which means it takes long and short positions on stocks, betting that they will go either up or down, so that the long and short positions balance each other out to make its ‘net’ exposure to the market zero.
The firm’s investment process is heavily driven by quantitative modelling, combining a wide range of different investment factors and styles.
In hiring Mr Hollyman and looking to launch its first retail fund, the firm is now looking to broaden its appeal to those outside of the hedge fund industry.